The UK Government has reaffirmed its long-standing policy on 'frozen pensions,' confirming that British pensioners living abroad will only receive annual State Pension increases in countries with reciprocal agreements. The update came in response to a written parliamentary question from Liberal Democrat MP Steve Darling, who asked about broadening the number of countries where the UK State Pension receives an annual increase.
Government Position on Uprating
Pensions Minister Torsten Bell, responding on behalf of the Department for Work and Pensions (DWP), stated: "UK State Pensions are payable worldwide, without regard to nationality and are only uprated abroad where we have a legal requirement to do so, for example in countries with which we have a reciprocal agreement that provides for uprating." He added that this approach has been supported by successive governments, prioritising those living in the UK when drawing up expenditure plans for additional pensioner benefits.
The response indicates no plans to extend annual increases to pensioners in countries where payments are frozen at the point of emigration. The 'frozen pensions' policy affects hundreds of thousands of British pensioners, with payments fixed at the rate when they moved abroad or first became entitled, unless they reside in a country with a reciprocal agreement.
Impact on Pensioners
Countries where UK State Pensions remain frozen include Australia, Canada, New Zealand, and South Africa. In contrast, pensioners in the United States and many European nations continue to receive annual increases due to reciprocal social security agreements. As a result, some pensioners have seen the value of their State Pension decline significantly over time.
Campaign group End Frozen Pensions reports that around 450,000 British pensioners are currently affected. Research by the campaign found that 49% of affected pensioners receive £65 per week or less, and an estimated 86% were not informed their State Pension would be frozen. Campaigners highlight that some pensioners receive as little as £20 per week.
Government Justification and Campaign Response
The UK Government defends its approach, citing the need to balance public spending and prioritise support for pensioners living in the UK. End Frozen Pensions argues the policy unfairly penalises those who paid National Insurance contributions throughout their working lives before retiring overseas. The campaign continues to call for an end to the policy, which has been maintained by successive governments.
